USOIL: Recent Low Test Looks Bullish
The current USOIL structure indicates that the bearish cycle degree wave c has been completed.
We expect the recent upside starting at the c wave’s low to form a standard zigzag, which points at a bullish corrective Ⓐ-Ⓑ-Ⓒ pattern of the primary degree.
In a standard zigzag, we have a 5-waves move in wave Ⓐ (whereas in complex zigzags we have a 3-wave move). The particular structure contains waves (1)-(2)-(3)-(4)-(5) as part of the first correction.
At the time of writing, we can notice that intermediate wave (3) of Ⓐ has ended and a correction in wave (4) initiated. Without clear evidence as to where wave (4) will complete its bearish course, we can limit the move to wave (1)’s top -given its impulsive nature. A test there could send prices near 54.50 i.e. just above wave (3)’s high.
When we consider the previous corrective primary structure, we can also identify an alternative scenario. Here, the bullish 5-wave impulse could reach higher highs as correction patterns are expected to interact with one another; cross above the previous wave Ⓐ near 58 at least.
At the time of writing, we have only recently formed intermediate impulse (1), and now we see a small downward correction into wave (2). Once that’s done and dusted, we are likely to see further upside.
WTI could reach levels above the 60 round resistance if the recent high is wave (1). The projected level is a tad higher than the previous primary wave Ⓑ. The target, however, can and should be adjusted as the trend develops and incoming data help draw new ideas.